Are Credit Scores Valid?

When you obtain a copy of your credit report, you can also pay to access your credit score. In some cases, the credit score displayed may not seem completely accurate. Your credit score is a compilation of all the information that credit bureaus document on your credit report. In some cases, your credit score may be affected by incorrect information.

Credit Reports

Every time you make a payment, open an account, close an account or take some other action that involves a creditor, it usually is reported to the credit bureaus. The three major credit bureaus -- Equifax, Experian and TransUnion -- document this information in a credit report. Information from your report is used to calculate your credit score. Because the number is based on the information in the report, the score is only as accurate as the credit report.

Faulty Information

Creditors and the credit bureaus sometimes make mistakes. A creditor might submit information for you that belongs to another customer, or the credit bureau may report accounts as delinquent that were paid on time. When the information on your credit report is inaccurately reported, it can lower your credit score. If you believe the information on your credit report is inaccurate, you can dispute the infomation with the credit bureaus. You can obtain a free copy of your credit report each year through AnnualCreditReport.com. To dispute an item on your report, visit the website of the appropriate credit bureau and complete a dispute form. You also can mail a dispute letter to the credit bureaus as well as to the creditor involved.

Credit Reports Updated

In some cases, your credit report may not have been updated in a timely manner. When you pay off an account, you might expect the information to go onto your credit report automatically. However, most creditors update their information to credit bureaus monthly or quarterly. As a result, the information in your credit report may not change immediately. If this is the case, it may take some time for your credit score to reflect your current credit situation.

Lingering Information

When you have negative items on your credit report, they can linger on the document for many years. These items can significantly pull down your credit score even if you had taken the necessary steps to try to rebuild it. For example, if you default on a credit card debt, this will show up on your credit report for seven years. This can negatively affect your credit score and make it difficult to receive approval for credit.